Housing Society Resolutions Void If Minutes Not Approved – Business Standard – 24-Nov-2014

November 25, 2014 - Uncategorized

A resolution, even if passed at an annual general meeting (AGM) of a housing society, would not be binding if there is a lapse in the subsequent procedure of confirmation of minutes within the stipulated time.

R C Chavan along with member Dhanraj Khamatkar has taken this view in the case of OLVPS Co-operative versus Allwyn D’Souza.

D’Souza had a pet dog. The society had passed a resolution at its general body meeting that owners who wanted to carry their pet dogs in the lift would have to pay Rs 500 a month. This was challenged by D’Souza in a complaint filed before the Central Mumbai District Forum.

The society questioned the maintainability of the complaint before the consumer forum, contending a dispute between the society and its members could only be adjudicated by the co-operative court. The society denied there was any deficiency in service, and stated the charge of Rs 500 on pet dog owners had been approved by the general body and passed at the AGM. This money was being utilised for maintenance.

The forum directed a refund of the monthly charges of Rs 500 collected from D’Souza and restrained the society from levying this amount henceforth. The society appealed against this order to the Maharashtra State Commission.

In its appeal, the society pointed out the same issue had also been raised before the assistant registrar of co-operative societies, who had held the charge was justified, as it had been approved by the general body at its meeting. The society argued the same issue could not once again be agitated before the consumer forum. On the other hand, D’Souza argued the consumer forum could adjudicate the dispute, as the assistant registrar’s order had been challenged before the deputy registrar, who had observed the matter was before the consumer court.

Upholding D’Souza’s contention and relying on the judgment of the Supreme Court in Thirumurugan Co-operative Agricultural Credit Society case, the State Commission ruled that a dispute between a society and its member was maintainable under the Consumer Protection Act.

The society argued its bye-laws entitled it to levy the charge. D’Souza claimed such charge would be in contravention of the letter issued by the Animal Welfare Board of India. The Commission observed the letter was of no use, as it was not supported by any law or regulation or court ruling. The issue would have to be resolved in accordance with the society’s bye-laws.

The Commission concluded the society would have the right to levy a charge for pets using lifts, by passing an appropriate resolution. The society relied on a resolution passed on August 10, 2008, at a general body meeting. D’Souza claimed no such resolution had been passed, as the issue was not on the agenda. The society claimed the resolution had been passed while taking up ‘any other business with the permission of the chair’. But there was no such recording in the minutes circulated of the meeting of August 10, 2008, circulated on September 26, 2008. The resolution was later circulated on February 1, 2009, as an addendum.

The State Commission observed the bye-laws required the draft minutes to be circulated within 15 days and finalised within three months of the general body meeting. The addendum was added after this stipulated period of three months. The commission held such an addendum, being in violation of the bye-laws, was illegal and unenforceable. Accordingly, the levy of the charge in the absence of a valid resolution was held unjustified. By its judgment of November 17, 2014, the Commission upheld the forum’s order and dismissed the society’s appeal, with further costs of Rs 5,000.

The conclusion is that a society is entitled to levy charges provided it is approved by the general body at a valid meeting, in consonance with the bye-laws.

 

Business Standard

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